UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the period ended September 30, 2002
------------------
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]
For the transition period from to
--------------- ---------------
Commission File Number 0-14475
-------
PS PARTNERS IV, LTD.
--------------------
(Exact name of registrant as specified in its charter)
California 95-3931619
- ---------------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
701 Western Avenue
Glendale, California 91201-2394
- ---------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 244-8080
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
INDEX
PART I. FINANCIAL INFORMATION
Condensed balance sheets at September 30, 2002
and December 31, 2001 2
Condensed statements of income for the three
and nine months ended September 30, 2002 and 2001 3
Condensed statements of cash flows for the
nine months ended September 30, 2002 and 2001 4
Notes to condensed financial statements 5-6
Management's discussion and analysis of financial condition
and results of operations 7-10
Risk Factors 11-12
Controls and Procedures 12
PART II. OTHER INFORMATION
Item 1 - Legal Proceedings 13
(Items 2 through 5 are not applicable)
Item 6 - Exhibits and Reports on Form 8-K 13
PS PARTNERS IV, LTD.
CONDENSED BALANCE SHEETS
September 30, December 31,
2002 2001
-----------------------------------
(Unaudited)
ASSETS
Cash and cash equivalents $1,493,000 $1,741,000
Rent and other receivables 3,000 55,000
Real estate facility, at cost:
Land 101,000 101,000
Buildings and equipment 1,592,000 1,577,000
-----------------------------------
1,693,000 1,678,000
Less accumulated depreciation (918,000) (862,000)
-----------------------------------
775,000 816,000
Investment in real estate entities 13,962,000 14,364,000
Other assets 30,000 2,000
-----------------------------------
$16,263,000 $16,978,000
===================================
LIABILITIES AND PARTNERS' EQUITY
Accounts payable $199,000 $183,000
Advance payments from renters 12,000 10,000
Partners' equity:
Limited partners' equity, $500 per unit, 128,000
units authorized, issued and outstanding 15,809,000 16,534,000
General partner's equity 243,000 251,000
-----------------------------------
Total partners' equity 16,052,000 16,785,000
-----------------------------------
$16,263,000 $16,978,000
===================================
See accompanying notes.
2
PS PARTNERS IV, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------------------------------------------------
2002 2001 2002 2001
----------------------------------------------------------------------
REVENUE:
Rental income $81,000 $87,000 $237,000 $246,000
Interest and other income 42,000 15,000 108,000 116,000
----------------------------------------------------------------------
123,000 102,000 345,000 362,000
----------------------------------------------------------------------
COSTS AND EXPENSES:
Cost of operations 33,000 33,000 95,000 91,000
Management fees 4,000 5,000 14,000 14,000
Depreciation and amortization 19,000 19,000 56,000 57,000
Administrative 38,000 34,000 141,000 139,000
----------------------------------------------------------------------
94,000 91,000 306,000 301,000
----------------------------------------------------------------------
Income before equity in earnings of real
estate entities 29,000 11,000 39,000 61,000
Equity in earnings of real estate entities 954,000 931,000 2,927,000 2,799,000
----------------------------------------------------------------------
NET INCOME $983,000 $942,000 $2,966,000 $2,860,000
======================================================================
Limited partners' share of net income
($20.08 per unit in 2002 and
$18.06 per unit in 2001) $2,570,000 $2,312,000
General partner's share of net income 396,000 548,000
-----------------------------------
$2,966,000 $2,860,000
===================================
See accompanying notes.
3
PS PARTNERS IV, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
September 30,
-------------------------------------
2002 2001
-------------------------------------
Cash flows from operating activities:
Net income $2,966,000 $2,860,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 56,000 57,000
Decrease (increase) in rent and other receivables 52,000 (4,000)
Increase in other assets (28,000) -
Increase in accounts payable 16,000 79,000
Increase (decrease) in advance payments from renters 2,000 (5,000)
Equity in earnings of real estate entities (2,927,000) (2,799,000)
-------------------------------------
Total adjustments (2,829,000) (2,672,000)
-------------------------------------
Net cash provided by operating activities 137,000 188,000
-------------------------------------
Cash flows from investing activities:
Distributions from real estate entities 3,329,000 3,232,000
Additions to real estate facility (15,000) (3,000)
-------------------------------------
Net cash provided by investing activities 3,314,000 3,229,000
-------------------------------------
Cash flows from financing activities:
Distributions to partners (3,699,000) (5,249,000)
-------------------------------------
Net cash used in financing activities (3,699,000) (5,249,000)
-------------------------------------
Net decrease in cash and cash equivalents (248,000) (1,832,000)
Cash and cash equivalents at the beginning of the period 1,741,000 3,727,000
-------------------------------------
Cash and cash equivalents at the end of the period $1,493,000 $1,895,000
=====================================
See accompanying notes.
4
PS PARTNERS IV, LTD.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
(UNAUDITED)
1. The accompanying unaudited condensed financial statements have been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although management believes
that the disclosures contained herein are adequate to make the
information presented not misleading. These unaudited condensed
financial statements should be read in conjunction with the financial
statements and related notes appearing in the Partnership's Form 10-K
for the year ended December 31, 2001.
2. In the opinion of management, the accompanying unaudited condensed
financial statements reflect all adjustments, consisting of only normal
accruals, necessary to present fairly the Partnership's financial
position at September 30, 2002, the results of operations for the three
and nine months ended September 30, 2002 and 2001 and cash flows for
the nine months then ended.
3. The results of operations for the three and nine months ended September
30, 2002 are not necessarily indicative of the results to be expected
for the full year.
4. In October 2001, the Financial Accounting Standards Board (FASB) issued
Statement No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets." In June 2001, the FASB issued Statement of
Financial Accounting Standard No. 142, "Goodwill and Other Intangible
Assets," ("SFAS 142"). We adopted these statements effective January 1,
2002.
We evaluate our long-lived assets on a quarterly basis for indicators
of impairment. When indicators of impairment are detected, we evaluate
the recoverability of such long-lived assets. To the extent that the
estimated future undiscounted cash flows are less than the respective
book value, an impairment charge is recorded. The Partnership has
determined at September 30, 2002 that no such impairments existed and,
accordingly, no impairment charges have been recorded.
Statement No. 144 also addresses the accounting for long-lived assets
that are likely to be disposed of before the end of their previously
estimated useful life. Such assets are to be reported at the lower of
their carrying amount or fair value, less cost to sell. Our evaluations
have determined that there are no such impairments at September 30,
2002.
5. Summarized combined financial data with respect to the Real Estate
Entities is as follows:
Nine Months Ended September 30,
------------------------------------
2002 2001
------------ ------------
Total revenues.................... $161,169,000 $135,420,000
Minority interest in income....... 24,256,000 19,743,000
Net income........................ 49,026,000 42,274,000
5
PS PARTNERS IV, LTD.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
(UNAUDITED)
6. Legal Proceedings
Henriquez v. Public Storage, Inc. (Filed June 2002).
----------------------------------------------------
The plaintiff in this case is suing Public Storage on behalf of a
purported class of renters who rented self-storage units from Public
Storage. Plaintiff alleges that Public Storage misrepresents the size
of its units and seeks damages and injunctive and declaratory relief
under California statutory and common law relating to consumer
protection, unfair competition, fraud and deceit and negligent
misrepresentation. Public Storage does not currently believe that the
outcome of this litigation will have a material adverse affect.
However, Public Storage cannot presently determine the potential total
damages, if any, or the ultimate outcome of the litigation. Public
Storage intends to vigorously contest the claims in this case.
Salaam, et. Al v. Public Storage (filed February 2000).
-------------------------------------------------------
The plaintiffs in this case are suing Public Storage on behalf of a
purported class of California resident property managers who claim that
they were not compensated for all the hours they worked. The named
plaintiffs have indicated that their claims total less than $20,000 in
aggregate. This maximum potential liability can only be increased if a
class is certified or if claims are permitted to be brought on behalf
of the others under the California Unfair Business Practices Act. The
plaintiffs' motion for class certification was denied in August 2002;
the plaintiffs have appealed this denial.
Public Storage is continuing to vigorously contest the claims in this
case and intends to resist any expansion beyond the named plaintiffs on
the grounds of lack of commonality of claims. Public Storage's
resistance will include opposing the plaintiffs' appeal of the court's
denial of class certification.
Public Storage is a party to various claims, complaints, and other
legal actions that have arisen in the normal course of business from
time to time. We believe that the outcome of these other pending legal
proceedings, in the aggregate, will not have a material adverse effect
upon the operations or financial position of Public Storage.
6
PS PARTNERS IV, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD LOOKING STATEMENTS
- --------------------------
When used within this document, the words "expects," "believes,"
"anticipates," "should," "estimates," and similar expressions are intended to
identify "forward-looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties, and other factors, which may cause the
actual results and performance of the Partnership to be materially different
from those expressed or implied in the forward looking statements. Such factors
include the impact of competition from new and existing real estate facilities
which could impact rents and occupancy levels at the real estate facilities that
the Partnership has an interest in; the Partnership's ability to effectively
compete in the markets that it does business in; the impact of the regulatory
environment as well as national, state, and local laws and regulations
including, without limitation, those governing Partnerships; and the impact of
general economic conditions upon rental rates and occupancy levels at the real
estate facilities that the Partnership has an interest in.
CRITICAL ACCOUNTING POLICIES
- ----------------------------
IMPAIRMENT OF LONG LIVED ASSETS
Substantially all of the Partnership's assets consist of long-lived
assets, primarily real estate. We evaluate our long-lived assets on a quarterly
basis for indicators of impairment. When indicators of impairment are detected,
we evaluate the recoverability of such long-lived assets. To the extent that the
estimated future undiscounted cash flows are less than the respective book
value, an impairment charge is recorded. The Partnership has determined at
September 30, 2002 that no such impairments existed and, accordingly, no
impairment charges have been recorded.
Future events could cause us to conclude that our long-lived assets are
impaired. Any resulting impairment loss could have a material adverse impact on
our financial condition and results of operations.
ESTIMATED USEFUL LIVES OF LONG-LIVED ASSETS
Substantially all of the Partnership's assets consist of depreciable,
long-lived assets. We record depreciation expense with respect to these assets
based upon their estimated useful lives. Any change in the estimated useful
lives of those assets, caused by functional or economic obsolescense or other
factors, could have a material adverse impact on our financial condition or
results of operations.
ACCRUALS FOR CONTINGENCIES
The Partnership is exposed to business and legal liability risks with
respect to events that have occurred, but in accordance with generally accepted
accounting principles has not accrued for such potential liabilities because the
loss is either not probable or not estimable or because the Partnership is not
aware of the event. Future events and the result of pending litigation could
result in such potential losses becoming probable and estimable, which could
have a material adverse impact on our financial condition or results of
operations. Some of these potential losses, which the Partnership is aware of,
are described in Note 6 to the Partnership's financial statements.
7
RESULTS OF OPERATIONS
- ---------------------
THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2001:
Our net income for the three months ended September 30, 2002 was
$983,000 compared to $942,000 for the three months ended September 30, 2001,
representing an increase of $41,000, or 4.4%. The increase is primarily due to
our share ($26,000) of a gain on sale of real estate recorded by PS Business
Parks, Inc. and a decrease in depreciation expense allocated to the Partnership
with respect to the Joint Venture.
Property Operations
- -------------------
Rental income for our wholly-owned mini-warehouse property was $81,000
compared to $87,000 for the three months ended September 30, 2002 and 2001,
respectively, representing a decrease of $6,000 or 6.9%. Cost of operations
(including management fees) decreased by $1,000 or 2.6%, to $37,000 from $38,000
for the three months ended September 30, 2002 and 2001, respectively.
Accordingly, for our wholly-owned mini-warehouse property, property net
operating income decreased by $5,000 or 10.2%, from $49,000 to $44,000 for the
three months ended September 30, 2001 and 2002, respectively.
Equity in Earnings of Real Estate Entities
- ------------------------------------------
Equity in earnings of real estate entities was $954,000 in the three
months ended September 30, 2002 as compared to $931,000 during the three months
ended September 30, 2001, representing an increase of $23,000 or 2.5%. The
increase is primarily due to our share ($26,000) of a gain on sale of real
estate recorded by PS Business Parks, Inc. and a decrease in depreciation
expense allocated to the Partnership with respect to the Joint Venture,
partially offset by our share of lower property operations at the real estate
facilities that we have an interest in.
Interest Income
- ---------------
Interest income increased by $27,000, from $15,000 for the three months
ended September 30, 2001 to $42,000 for the three months ended September 30,
2002, due to higher invested cash balances.
Depreciation and Amortization
- -----------------------------
Depreciation and amortization remained stable at $19,000 for the three
months ended September 30, 2001 and 2002.
Administrative
- --------------
Administrative expense increased by $4,000 or 11.8%, to $38,000 for the
three months ended September 30, 2002 as compared to $34,000 for the same period
in 2001.
NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2001:
Our net income for the nine months ended September 30, 2002 was
$2,966,000 compared to $2,860,000 for the nine months ended September 30, 2001,
representing an increase of $106,000 or 3.7%. The increase is primarily due to
our share ($100,000) of a gain on sale of real estate recorded by PS Business
Parks and a decrease in depreciation expense allocated to the Partnership with
respect to the Joint Venture, partially offset by our share of lower property
operations at the Mini-Warehouse Properties.
8
Property Operations
- -------------------
Rental income for our wholly-owned mini-warehouse property was $237,000
compared to $246,000 for the nine months ended September 30, 2002 and 2001,
respectively, representing a decrease of $9,000 or 3.7%. Cost of operations
(including management fees) increased by $4,000 or 3.8%, to $109,000 from
$105,000 for the nine months ended September 30, 2002 and 2001, respectively.
Accordingly, for our wholly-owned mini-warehouse property, property net
operating income decreased by $13,000 or 9.2%, from $141,000 to $128,000 for the
nine months ended September 30, 2001 and 2002, respectively.
Equity in Earnings of Real Estate Entities
- ------------------------------------------
Equity in earnings of real estate entities was $2,927,000 in the nine
months ended September 30, 2002 as compared to $2,799,000 during the nine months
ended September 30, 2001, representing an increase of $128,000 or 4.6%. The
increase is primarily due to our share ($100,000) of a gain on sale of real
estate recorded by PS Business Parks and a decrease in depreciation expense
allocated to the Partnership with respect to the Joint Venture, partially offset
by our share of lower property operations at the real estate facilities that we
have an interest in.
Interest Income
- ---------------
Interest income decreased by $8,000 or 6.9%, from $116,000 for the nine
months ended September 30, 2001 to $108,000 for the nine months ended September
30, 2002, due to lower invested cash balances over the nine month period.
Depreciation and Amortization
- -----------------------------
Depreciation and amortization decreased by $1,000 or 1.8%, from $57,000
to $56,000 for the nine months ended September 30, 2001 and 2002, respectively.
Administrative
- --------------
Administrative expense increased by $2,000 or 1.4% to $141,000 for the
nine months ended September 30, 2002 as compared to $139,000 for the same period
in 2001.
SUPPLEMENTAL PROPERTY DATA
- --------------------------
Most of our net income is from the our share of the operating results
of the Mini-Warehouse Properties. Therefore, in order to evaluate our operating
results, the General Partners analyze the operating performance of the
Mini-Warehouse Properties.
9
THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2001:
Rental income for the Mini-Warehouse Properties was $3,412,000 compared
to $3,556,000 for the three months ended September 30, 2002 and 2001,
respectively, representing a decrease of $144,000 or 4.0%. The decrease in
rental income is primarily attributable to a decrease in average occupancy rates
and a reduction in the annual average realized rent per square foot at the
Mini-Warehouse Properties. The annual average realized rent per square foot for
the Mini-Warehouse Properties was $8.90 compared to $8.87 for the three months
ended September 30, 2002 and 2001, respectively. The weighted average occupancy
levels at the Mini-Warehouse Properties decreased from 88% to 84% for the three
months ended September 30, 2001 and 2002, respectively. Cost of operations
(including management fees) decreased $34,000 or 2.3%, to $1,414,000 from
$1,448,000 for the three months ended September 30, 2002 and 2001, respectively.
This decrease is primarily attributable to higher advertising and promotion, and
repairs and maintenance expense. Accordingly, for the Mini-Warehouse Properties,
property net operating income decreased by $110,000 or 5.2%, from $2,108,000 to
$1,998,000 for the three months ended September 30, 2001 and 2002, respectively.
NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2001:
Rental income for the Mini-Warehouse Properties was $10,155,000
compared to $10,395,000 for the nine months ended September 30, 2002 and 2001,
respectively, representing a decrease of $240,000 or 2.3%. The decrease in
rental income is primarily attributable to decreased average occupancy rates at
the Mini-Warehouse Properties. The annual average realized rent per square foot
for the Mini-Warehouse Properties was $8.86 compared to $8.82 for the nine
months ended September 30, 2002 and 2001, respectively. The weighted average
occupancy levels at the Mini-Warehouse Properties decreased from 86% to 84% for
the nine months ended September 30, 2001 and 2002, respectively. Cost of
operations (including management fees) decreased by $10,000 or 0.2%, to
$4,003,000 from $4,013,000 for the nine months ended September 30, 2002 and
2001, respectively. Accordingly, for the Mini-Warehouse Properties, property net
operating income decreased by $230,000 or 3.6%, from $6,382,000 to $6,152,000
for the nine months ended September 30, 2001 and 2002, respectively.
Liquidity and Capital Resources
- -------------------------------
We have adequate sources of cash to finance our operations, both on a
short-term and long-term basis, primarily from internally generated cash from
property operations and cash reserves. Cash generated from operations and
distributions from real estate entities ($3,466,000 for the nine months ended
September 30, 2002) has been sufficient to meet all of our current obligations.
During 2002, we do not anticipate incurring significant costs for
capital improvements for the Partnership's wholly-owned property. Total capital
improvements for the nine months ended September 30, 2002 with respect to this
property was $15,000.
We paid distributions to the limited and general partners totaling
$3,295,000 ($25.74 per unit) and $404,000, respectively, during the first nine
months of 2002. Included in these distributions is $890,000 ($6.96 per unit) and
$10,000 paid to the limited and general partners, respectively, in special
distributions. Future distribution rates may be adjusted to levels which are
supported by operating cash flow after capital improvements and any other
necessary obligations.
10
RISK FACTORS
- ------------
In addition to the other information in our Form 10-Q, you should
consider the following factors in evaluating the Partnership:
PUBLIC STORAGE CONTROLS US.
Public Storage owns approximately 58.7% of our outstanding limited
partnership units and is our general partner. Consequently, Public Storage
controls matters submitted to a vote of our unitholders, including amending our
organizational documents, dissolving the Partnership and approving other
extraordinary transactions.
SINCE OUR BUSINESS CONSISTS PRIMARILY OF ACQUIRING AND OPERATING REAL ESTATE, WE
ARE SUBJECT TO REAL ESTATE OPERATING RISKS.
The value of our investments may be reduced by general risks of real
estate ownership. Since we derive substantially all of our income from real
estate operations, we are subject to the general risks of owning real
estate-related assets, including:
o lack of demand for rental spaces or units in a locale;
o changes in general economic or local conditions;
o changes in supply of or demand for similar or competing facilities
in an area;
o potential terrorist attacks;
o the impact of environmental protection laws;
o changes in interest rates and availability of permanent mortgage
funds which may render the sale or financing of a property
difficult or unattractive; and
o changes in tax, real estate and zoning laws.
There is significant competition among self-storage facilities. All of
the properties the Partnership has an interest in are self-storage facilities.
Competition in the market areas in which many of our properties are located is
significant and has affected the occupancy levels, rental rates and operating
expenses of some of our properties. Any increase in availability of funds for
investment in real estate may accelerate competition. Further development of
self-storage facilities may intensify competition among operators of
self-storage facilities in certain market areas in which we operate.
We may incur significant environmental costs and liabilities. As an
owner of real properties, under various federal, state and local environmental
laws, we are required to clean up spills or other releases of hazardous or toxic
substances on or from our properties. Certain environmental laws impose
liability whether or not the owner knew of, or was responsible for, the presence
of the hazardous or toxic substances. In some cases, liability may not be
limited to the value of the property. The presence of these substances, or the
failure to properly remediate any resulting contamination, also may adversely
affect the owner's or operator's ability to sell, lease or operate its property
or to borrow using its property as collateral.
11
We have conducted preliminary environmental assessments on the
properties the Partnership has an interest in to evaluate the environmental
condition of, and potential environmental liabilities associated with, our
properties. These assessments generally consist of an investigation of
environmental conditions at the property (not including soil or groundwater
sampling or analysis), as well as a review of available information regarding
the site and publicly available data regarding conditions at other sites in the
vicinity. In connection with these property assessments, we have become aware
that prior operations or activities at some facilities or from nearby locations
have or may have resulted in contamination to the soil or groundwater at these
facilities. In this regard, some of our facilities are or may be the subject of
federal or state environment investigations or remedial actions. Although we
cannot provide any assurance, based on the preliminary environmental
assessments, we believe we have funds available to cover any liability from
environmental contamination or potential contamination and we are not aware of
any environmental contamination of our facilities material to our overall
business, financial condition or results of operation.
CONTROLS AND PROCEDURES
- -----------------------
The Partnership maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in reports the
Partnership files and submits under the Exchange Act, is recorded, processed,
summarized and reported within the time periods specified in accordance with SEC
guidelines and that such information is communicated to the Partnership's
management, including its Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure based on the definition
of "disclosure controls and procedures" in Rule 13a-14(c) of the Exchange Act.
In designing and evaluating the disclosure controls and procedures, management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives.
Within 90 days prior to the date of this report, the Partnership
carried out an evaluation, under the supervision and with the participation of
the Partnership's management, including the Partnership's Chief Executive
Officer and the Partnership's Chief Financial Officer, of the effectiveness of
the design and operation of the Partnership's disclosure controls and
procedures. Based upon this evaluation, the Partnership's Chief Executive
Officer and Chief Financial Officer concluded that the Partnership's disclosure
controls and procedures were effective. There have been no significant changes
in the Partnership's internal controls or in other factors that could
significantly affect the internal controls subsequent to the date of the
Partnership's evaluation.
12
PART II. OTHER INFORMATION
Item 1 Legal Proceedings
-----------------
Henriquez v. Public Storage, Inc. (Filed June 2002).
----------------------------------------------------
The plaintiff in this case is suing Public Storage on behalf
of a purported class of renters who rented self-storage units from
Public Storage. Plaintiff alleges that Public Storage misrepresents the
size of its units and seeks damages and injunctive and declaratory
relief under California statutory and common law relating to consumer
protection, unfair competition, fraud and deceit and negligent
misrepresentation. Public Storage does not currently believe that the
outcome of this litigation will have a material adverse affect.
However, Public Storage cannot presently determine the potential total
damages, if any, or the ultimate outcome of the litigation. Public
Storage intends to vigorously contest the claims in this case.
Salaam, et. Al v. Public Storage (filed February 2000).
-------------------------------------------------------
The plaintiffs in this case are suing Public Storage on behalf
of a purported class of California resident property managers who claim
that they were not compensated for all the hours they worked. The named
plaintiffs have indicated that their claims total less than $20,000 in
aggregate. This maximum potential liability can only be increased if a
class is certified or if claims are permitted to be brought on behalf
of the others under the California Unfair Business Practices Act. The
plaintiffs' motion for class certification was denied in August 2002;
the plaintiffs have appealed this denial.
Public Storage is continuing to vigorously contest the claims
in this case and intends to resist any expansion beyond the named
plaintiffs on the grounds of lack of commonality of claims. Public
Storage's resistance will include opposing the plaintiffs' appeal of
the court's denial of class certification.
Public Storage is a party to various claims, complaints, and
other legal actions that have arisen in the normal course of business
from time to time. We believe that the outcome of these other pending
legal proceedings, in the aggregate, will not have a material adverse
effect upon the operations or financial position of Public Storage.
Items 2 through 5 are not applicable.
Item 6 Exhibits and Reports on Form 8-K
--------------------------------
(a) The following Exhibits are included herein:
(1) Certification of CEO and CFO Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
(b) Reports on Form 8-K
None
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: November 13, 2002
PS PARTNERS IV, LTD.
BY: Public Storage, Inc.
General Partner
BY: /s/ John Reyes
--------------------------------------------
John Reyes
Senior Vice President and Chief Financial
Officer of Public Storage, Inc.
(principal financial and accounting officer)
14
Exhibit 99.1
CERTIFICATION OF CEO AND CFO PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of PS Partners IV, Ltd.
(the "Partnership") for the quarterly period ended September 30, 2002 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
B. Wayne Hughes, as Chief Executive Officer of Public Storage, Inc. (through
November 7, 2002), Ronald L. Havner, Jr., as Chief Executive Officer of Public
Storage, Inc. (after November 7, 2002), and John Reyes, as Chief Financial
Officer of Public Storage, Inc., each hereby certifies, pursuant to 18
U.S.C.ss.1350, as adopted pursuant toss.906 of the Sarbanes-Oxley Act of 2002,
that:
(1) The Report fully complies with the requirements of Section 13(a)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Partnership.
/s/ B. Wayne Hughes
- --------------------------------------
Name: B. Wayne Hughes
Title: Chief Executive Officer of Public Storage, Inc.
(through November 7, 2002), Corporate General Partner
Date: November 13, 2002
/s/ Ronald L. Havner, Jr.
- --------------------------------------
Name: Ronald L. Havner, Jr.
Title: Chief Executive Officer of Public Storage, Inc. (after November 7, 2002),
Corporate General Partner
Date: November 13, 2002
/s/ John Reyes
- --------------------------------------
Name: John Reyes
Title: Chief Financial Officer of Public Storage, Inc.,
Corporate General Partner
Date: November 13, 2002
This certification accompanies the Report pursuant to ss. 906 of the
Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the
Sarbanes-Oxley Act of 2002, be deemed filed by the Partnership for purposes of
ss.18 of the Securities Exchange Act of 1934, as amended.
Exhibit 99.2
CERTIFICATION OF CEO AND CFO PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, B. Wayne Hughes, certify that:
1. I have reviewed this quarterly report on Form 10-Q of PS Partners IV, Ltd.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
/s/ B. Wayne Hughes
- --------------------------------------
Name: B. Wayne Hughes
Title: Chief Executive Officer of Public Storage, Inc.
(through November 7, 2002), Corporate General Partner
Date: November 13, 2002
Exhibit 99.3
CERTIFICATION OF CEO AND CFO PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Ronald L. Havner, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-Q of PS Partners IV, Ltd.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
/s/ Ronald L. Havner, Jr.
- --------------------------------------
Name: Ronald L. Havner, Jr.
Title: Chief Executive Officer of Public Storage, Inc. (after November 7, 2002),
Corporate General Partner
Date: November 13, 2002
Exhibit 99.4
CERTIFICATION OF CEO AND CFO PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, John Reyes, certify that:
1. I have reviewed this quarterly report on Form 10-Q of PS Partners IV, Ltd.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
/s/ John Reyes
- --------------------------------------
Name: John Reyes
Title: Chief Financial Officer of Public Storage, Inc.,
Corporate General Partner
Date: November 13, 2002